Paypal vs Venmo: Which is the best transfer service 2021?

Trying to draw a clear line between Paypal vs Venmo and which serves as the best transfer service in 2021?

With recent advancements made in the Fintech industry, mobile payment became an easier way to request, send and receive cash. Ranging from its ease for online shopping, to traditional purchases, Paypal and Venmo stand out as the most popular global payment systems.

A lot of times the close similarities in function make it difficult to decide between PayPal vs Venmo, which of them serves as the best transfer service. The fact that PayPal owns Venmo makes it more confusing for clients to cut a clear difference. 

We have a lot of potential users trying to get answers to some of the doubts in their minds. Is Venmo and Paypal the same? Which money transfer app is the best? As long as these questions remain unanswered, it will be difficult for you to select which one works well for you.

However, choosing the best payment system between PayPal vs Venmo boils down to the type of transaction made.

Nevertheless, here’s a detailed review of Paypal vs Venmo and which is the best transfer service in 2021. This will help you decide on the best choice for your transaction.

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Paypal vs Venmo: How do they work?

Most global payment systems have a similar mode of operation. There are just slight variations that make each transfer service different from the other.

Paypal bought Venmo in 2013, after its acquisition by Braintree. The purpose and mode of operations for these two giant payment platforms differ. Irrespective of the fact that the same corporation owns them.

Venmo serves as a medium for P2P, while Paypal works better as a payment service for B2B and B2C transactions.

Venmo works as a peer-to-peer payment platform that allows you to exchange funds between your friends and family. On the other hand, PayPal opens up a global opportunity to send funds outside your friend circle.

While Venmo requires that you sign up with your phone number, Paypal requires that you register with your email. However, both payment systems make use of your credit and debit cards.

Is Venmo and PayPal the same?

Although the same corporation owns PayPal and Venmo, they are not the same. They function as independent units as international payment systems.

Their mode of operation is also different. Venmo is designed for transactions between family and friends, PayPal cuts across boundaries to even strangers. This is because Paypal serves as a payment intermediary between B2B and B2C components.

However, there are certain similarities between both payment systems.

Venmo vs PayPal: Similarities

 

  1. Paypal and Venmo have mobile apps.
  2. PayPal and Venmo run on Android and iOS platforms.
  3. Registration on Paypal and Venmo are free
  4. PayPal and Venmo have transaction limits
  5. Both payment systems(PayPal and Venmo) make use of similar payment and transfer methods; credit cards, debit cards, bank transfers, and funds.

PayPal vs Venmo: Which is the best Transfer 2021?

We will be comparing Paypal and Venmo using different factors. This will help you easily decide which money transfer app is the best for you.

Paypal vs Venmo: Client Base

PayPal

  • International

Venmo

  • U.S only

PayPal vs Venmo: Transaction fees

PayPal

  • Zero transaction charges for sending money with bank transfer or account balance
  • Free money transfers for family and friends within US
  • Domestic outgoing (sending) transactions are free to users within(EEA, EUR/SEK), this is if the sender is within these regions (AD, HR, IS, MC)
  • Other transactions from/to any other part of the world have a transaction rate of 3.4% + the fixed fees

Venmo

  • Business profiles of Venmo have transaction fees at a standard rate of 1.9% and $0.10 of the payment.
  • Free Electronic withdrawals through the standard option. There are no accrued costs to transfer money from your Venmo account to your bank account through the standard option.
  • Transaction rates within the ranges of 1.5% to 1% at fees of $0.25 – $15 and $0.25 to $10 for instant transfers
  • There are costs for purchasing cryptocurrencies with Venmo. These purchases come in different ranges according to the amount of cryptocurrency purchased. 

Cryptocurrency of $1 – $24.99 have a minimum fee of $0.50, $25-$100 are pegged at rates of 2.3%, $100.01 – $200 have 2.0%, $200.01 – $1000.00 have 1.8%, $1000 have rates of 1.5%.

  • There are no fees for automated customer service, live customer support, real-time alerts, account statements, and transaction declines due to insufficient funds.

Venmo vs PayPal: Transaction limits

Paypal

  • Paypal offers unlimited transfers for verified accounts. However, there’s a transfer limit of $10,000 per single transaction.

Venmo

  • Venmo offers maximum weekly spending of $4999.99 for person-to-person transactions and $6999.99 for Venmo Mastercard Debit card transactions. Venmo’s spending limit varies for non-registered users. 

Users that are yet to complete their identity verification are limited to weekly spending of $299.99. Users with a complete identity verification process are entailed to a combined weekly spending limit of $6999.99. Venmo users are also limited to $20,000 weekly purchases for cryptocurrency and a $50,000 cryptocurrency purchase in 12 months.

PayPal vs Venmo: Overall Review

PayPal and Venmo are amazing payment services. Probably, an overall review will help you decide on the best option for you.

Venmo

PROS

  • Sends to only friends, family, and trusted contacts
  • Supports Exchange of gifts between loved ones
  • A good option to fund a shared activity
  • A smart option for small business and medium scale purchases

CONS

  • U.S Based
  • Strictly made for trusted contacts
  • Not a wise option for B2B business models
  • Limited Transaction limit

 

PayPal

PROS

  • Global Payment system
  • Send and receive outside your trusted contact
  • High Transaction limit
  • Multiple user functionality

CONS

  • There are numerous cases of hold funds
  • Unresolved business complaints
  • Users can be open to fraud as there are no limits to who you can send or receive money from.

CONCLUSION

It might not be an easy task to draw a clear conclusion on the differences and similarities between PayPal vs. Venmo. Users have different preferences and choices. Your choice amongst any of these payment platforms should concentrate on your reason for using them. This boils down to accessibility, size of business, and your client base. You can also consider the fees involved with each payment service. This will help you decide which of them perfectly meets your aim.

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